Knowing that there is sales is one thing but seriously Kelvin, since you had opened this discussion thread, you really gotta ask the big issue .. is Tesla over valued?

Yes?

Let me share why..... haiayaaa.... hope you can appreciate this a forum for discussion la... nothing more... nothing about my one better than your one...


1. Tesla has turned in a couple of quarters where it had shown that the company can earn money but the big picture is... on an annual basis, Tesla is still recording losses the last 5 years.

2. Latest quarter. 5.98 Billion sales but profit is only a mere 16 million. That'a an eps of 0.09 sen.

3. This is only the 3rd time Tesla reported quarterly profits... Q3 2019 (143 million), Q4 2019 (105 million), Q1 2020 (16 million).
3 consecutive quarters of profits but profits are lesser and lesser..

4. Yes, there is improvement in cash flow.. which helps ease much of last year's concern that Tesla could go under (losing money and burning cash like hell)

Source: https://www.marketwatch.com/investing/stock.../income/quarter
https://ir.tesla.com/financial-information/quarterly-results

5. Just in terms of EPS... some facts...

Tesla EPS for the twelve months ending March 31, 2020 was $-0.84.
Tesla 2019 annual EPS was $-4.87
Tesla 2018 annual EPS was $-5.72
Tesla 2017 annual EPS was $-11.83
Tesla 2016 annual EPS was $-4.68
Tesla 2015 annual EPS was $-6.93

If one take away the company name (to remove any bias for/against the stock), ask yourself this...
Based on the above numbers
The 3 quarter they reported a profit, their net profit margins are super thin...
yes, with 3 consecutive quarters it appears the company could finally report a first annual profit....
now just based on this (without the stock name) ...
with a negative trailing eps ....
should this stock trade at 1500?

with such financials...
should Tesla trade with a higher market capital than those companies mentioned earlier?


yup .... is Tesla over valued?

This post has been edited by Boon3: Jul 18 2020, 01:14 PM

that is exactly why most people don't value Tesla as an automotive company. you are looking at it exactly like an automotive company.

Don't get me wrong, I also agree that Tesla is now very very overvalued. I don't deny that one bit. I entered this stock with the expectation that it'll grow to 1 trillion in market cap only from 2030, not 280 billion in 2020. My early projection was share price of around $400 by 2021.

My cost basis is $280, that being said, I'm happy that it's this high, but I know that its valuation now does not make sense, at least based on logical and historical metrics.

However, I'm valuing it based on forward metrics too. My horizon is 10+years and pretty confident on my thesis considering the risk reward ratio.

All in all, there's no animosity here. I'm just sharing and rebutting the points put forward. I don't mind being pointed as wrong but some contributors did not put forward any valid arguments to support their statements.

Is Tesla is the only one that produce electric car?

I see BMW also has electric car.

Other brands are available but currently Tesla has the highest market share in most markets.

Yes, it's good that you had a plan. Having a 10+ plan certainly helps. However, sometimes we can get blessed by the market and our targets are realised far too soon. I certainly am lucky to be blessed more than a couple of times. What I did was I forced to reevaluate. Do I really want to wait much longer? Does longer really helps or perhaps based on law of probabilities and averages and also reassessing the market risks, I ask myself, do I want to be in control of the situation and sell for a profit? Cos sometimes, waiting much longer, might not really improve my profits...

LOL. Life decessions.

Anyway, all the best

Elon is tweeting about memes involving bears on twitter.

Short term gamble: Buy calls before earnings.

Be careful of IV though.

I'm not doing it though. Don't blame me if rugi.

One of the biggest shortcomings of competing models is range — the distance an electric car can go before needing to be recharged. The maximum for the E-tron and Taycan is about 200 miles. The I-Pace and Bolt go about 235 to 260 miles. The least expensive Tesla Model 3 has a range of 250 miles, and most of the company’s cars go 300 miles or more on a single charge.

Sam Abuelsamid, an analyst at Guidehouse Insights, said that the Audi, Jaguar and Porsche vehicles were superior to Teslas in some ways, such as look, feel and finish, but that their limited range had put off many buyers.

“The difference is too great for a lot of consumers to ignore,” he said.
...
By the end of this year, Ford Motor expects to start selling an electric S.U.V., the Mustang Mach-E, that is styled to look like the company’s famous sports car. It is promising a version of the car with a range of 300 miles or more. G.M. has said it will offer a new Bolt with longer range by the end of this year, followed by more than 20 other electric models over the next three years.

Volkswagen next year will begin selling an electric S.U.V., the ID4, which will also have a range of 300 miles. The company on Monday started taking orders in Europe for the ID3, a hatchback that will sell for about 10,000 euros less than the Model 3; the car is not expected to be sold in the United States.
....
And various start-ups are raising billions of dollars to challenge Tesla. Among the most promising is Rivian, which is backed by Amazon, Ford and other investors. The company, which is based in Michigan, plans to bring out next year a pickup truck and an S.U.V. that can go up to 400 miles.

Coming even sooner is a new company, Polestar, owned by Volvo and Volvo’s Chinese parent, Zhejiang Geely Holding. The Polestar 2 is a hatchback that is supposed to go 275 miles before needing a recharge and has the kind of agility — zero to 62 miles an hour in less than five seconds — that appeals to aficionados. It will start at $59,900 in the United States, and buyers will be able to claim a $7,500 federal tax credit and state incentives. The company will also sell the Polestar 1, a sports coupe that starts at $155,000.

https://www.nytimes.com/2020/07/22/business...i-polestar.html

Maybe we should focus more on the autonomous part of it. Saw somewhere on ARK Invest analysis, their bull case is up to $15k per share if Tesla could pull off the self driving autonomous Robotaxi and $1,500 for bear case with no autonomous robotaxi.

Happy reading


Attached File(s)
 Q2_20_Update.pdf ( 2.07mb ) Number of downloads: 22

S&P 500.

ARK's research is always worth a read.

I have followed them since late 2018 and their insights have given me the inspiration to look for companies that I would have otherwise overlooked.

About Tesla, they do show a profound understanding of the company and their analysis are not bound by the usual Wall street analysis of quarterly price targets and traditional metrics.

Great lessons to be learnt there.

On the earnings front, here are my takeaways. Feel free to pitch in your thoughts for everyone.

Positives:

1. Showing growth across the business groups
2. Focus on new production capacity, which shows demand is strong
3. Margins are improving despite ASP drop, which shows efficiencies and cost controls are there.

Negatives:
1. Big drop in Model S/X numbers shows slowing demand in luxury vehicles, Tesla may need a refresh such as those done by other automotive sectors. Not sure if that's a good idea. May need a totally new generation to refresh that segment.

2. Battery supply constraints still very much a problem.

3. Automotive revenue still takes up a big chunk of total revenue. Although growth in Energy seems healthy, may need to quickly ramp to reduce risk on overdependance on Auto. Challenges of battery supply and regulations here.

https://ir.tesla.com/news-releases/news-rel...one-stock-split

Tesla announced 5-1 stock split.

Anyone who can’t buy fractional shares can now own the stock as it will get “cheaper”.

Breached the $2k mark today.

Lots of investor money going into tech these days.

Exciting times ahead

I am one of those late joiners, jumped in when they announced the split at 1450s

Although I’m a bull, the rise is too fast in my opinion. It has reached my price target 3 years too early.

I dunno much about TA but I think it's going to have a pullback after the 1:5 split and S&P 500 inclusion. Either way, we are pretty certain TESLA future is bright in long term. Short term doesnt matter even if it correction about 50% tomorrow

To be honest, look at the nominal value of Apple market cap growth daily, then you will know Tesla is where it is due to changing of market factors and investor valuation. I guess this is the new normal of an ultra low yield environment.

If you consider those factor in mind and compare it to holding a 30 years treasuries. The whole Tesla valuation in might seemed very justifiable. There is just not much options left in the market at this point.

But don't you want to lock in some profit ? Or you feel it can go even higher ?